Like a plentiful oil well, the European Union (EU) has found, since 2004, that Microsoft is a rich source of funds. The EU allowed Microsoft to continue to operate in the region, but found it in violation of antitrust laws. Its conclusion -- in order to stay Microsoft will have to pay some big fines.

Now Microsoft has been hit with another massive fine by the European Union. The EU says that between July 2006, and October 2007, Microsoft's refused to comply during its legal fight against the EU, making it eligible for the increased rate of fines of approximately $3.83M a day, for each day of non-compliance. The new fine announced by the EU for this period sums up to $1.4B USD (€899M).

The fine marks the largest antitrust fine in international history, and a record judgment against Microsoft.

Microsoft indicated it is willing to accept the fine, though, commenting that the fines were about past issues and that the company is now operating under revised principles that make its software more open. Microsoft twice reduced its patent rate and information license rate, last May. Finally in October it reduced its rates even further, offering new license for interoperability information for a flat fee of $14,000 and an optional worldwide patent license for a reduced royalty of 0.4%. The October reduction appears to be satisfactory in the EU's eyes, though the initial reduction was not.

The changes in licensing policy went into effect on October 22, 2007. The changes help make it easier for smaller software firms to gain access to interoperability information, allowing them to interface with Microsoft products. Microsoft had initially demanded a royalty rate totaling 3.87% of a licensee's product revenues and demanded an additional 2.98% of products' revenues from companies seeking access to communications information, which Microsoft deemed highly secret.

While the over $2.4B USD in fines reaped by the EU against Microsoft since 2004 have certainly hurt, Microsoft still has about $19.6B USD in cash reserves, when taking the most recent $1.4B USD fine into effect. Unfortunately for Microsoft, this may soon be shrinking further as the European recently launched two new investigations into Microsoft.